Marketing Definition, Features, Advantages, Disadvantages
Marketing Definition, Features, Advantages, Disadvantages: Marketing refers to activities a company undertakes to promote the buying or selling of a product or service. In 2017, The New York Times described it as “the art of telling stories so enthralling that people lose track of their wallets.”
It is one of the primary components of business management and commerce. Marketers can direct their product to other businesses (B2B marketing) or directly to consumers (B2C marketing). Regardless of who is being marketed to, several factors apply, including the perspective the marketers will use. Known as market orientations, they determine how marketers will approach the planning stage of marketing.
The marketing mix, which outlines the specifics of the product and how it will be sold, is affected by the environment surrounding the product, the results of marketing research and market research, and the characteristics of the product’s target market. Once these factors are determined, marketers must then decide what methods will be used to promote the product, including use of coupons and other price inducements.
The term marketing, what is commonly known as attracting customers, incorporates knowledge gained by studying the management of exchange relationships and is the business process of identifying, anticipating and satisfying customers’ needs and wants.
Definition
Marketing is defined by the American Marketing Association as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”. The term developed from the original meaning which referred literally to going to market with goods for sale. From a sales process engineering perspective, marketing is “a set of processes that are interconnected and interdependent with other functions of a business aimed at achieving customer interest and satisfaction”.
Philip Kotler defined marketing as “Satisfying needs and wants through an exchange process”. and a decade later defines it as “a social and managerial process by which individuals and groups obtain what they want and need through creating, offering and exchanging products of value with others”.
The Chartered Institute of Marketing defines marketing as “the management process responsible for identifying, anticipating and satisfying customer requirements profitably”. A similar concept is the value-based marketing which states the role of marketing to contribute to increasing shareholder value. In this context, marketing can be defined as “the management process that seeks to maximise returns to shareholders by developing relationships with valued customers and creating a competitive advantage“.
Marketing is a tricky topic to define and frame in. The Marketing studies or field has rapidly moved and reached a very high level but still defining is into some fixed variables is just impossible. Marketing is defined as the process responsible for identifying, anticipating, and satisfying customer requirements profitably.
Modern marketing has two different meanings in the minds of people who use the term.
Meaning of marketing conjures up the terms “selling, influencing, persuading” thought by many persons and always viewed and discussed as a business activity. They mistakenly think of marketing only as selling and promotion tasks, but only two of several marketing functions.
Unfortunately, the other meaning of marketing is weaker in the public minds; it is the concept of sensitively “serving and satisfying human needs.”
Here, we shall accept the second meaning since a company’s success depends to a great extent on identifying consumer needs, developing good products, and pricing, distributing, and promoting them effectively, which this meaning focuses on.
Now the question may come to your mind, is that why we have accepted the latter meaning. We are sure that you will be able to get the answer automatically as we proceed with our discussion in this lesson.
Marketing is still misunderstood by many marketing professionals, even in the developed world. The activities of marketing are obvious to everyone.
Some of the company functions, which are obviously marketing activities, include selling, market research, advertising, etc. All of these have been around for a long.
The word marketing, which describes the above as part of one operational function (marketing), is relatively recent in its modern usage.
Marketing is a comparatively new field. The formal study of ‘exchange processes and relationships’ which is called marketing started in the 1920s. To give you a clearer idea about marketing, let us take a look at the historical process.
The need for marketing evolved as a historical process. In the early stages of civilization, each person produced whatever he needed for himself.
Later came the age of specialization, and each person made a set of one item and then exchanged the excess with the others for items that he needed. This was the barter stage.
From there, civilization moved to the local market stage, where people brought their produce to a particular spot and exchanged goods there.
In remote villages of a 3rd world country, local bazaars are the meeting points where commodities are exchanged on certain days of the week. In more advanced communities, the temporary bazaar has evolved into a permanent feature with stalls and shops.
Later still, a need for money economy arose. The person who made the bullock cart could not exchange this one piece for the different items that he needed from different people.
There had to be a common denominator and so a medium of exchange developed. This medium was beads at one time, cows at another and many other items, until now we use money as a medium of exchange.
With the Industrial Revolution, which gave a fillip to the means of production of goods, the speed of selling could not keep pace with the speed of manufacture. Large quantities of stock started piling up.
Marketing Features
Customer focus:
The marketing function of a business is customer-centred. It makes an attempt to study the customer needs, and goods are produced accordingly. The business existence depends on human needs. In a competitive market, the goods that are best suited to the customer are the ones that are well-accepted. Hence, every activity of a business is customer-oriented.
Customer satisfaction:
A customer expects some services or benefits from the product for which payment is made. If this benefit is more than the amount paid, then the customer is satisfied. In the long run, customer satisfaction helps to retain market demand. It helps achieve organizational objectives. Customer satisfaction can be enhanced by providing value-added services, which includes providing additional facilities at little or no extra cost.
Objective-oriented:
All marketing activities are objective-oriented. Different objectives are fixed at different levels, but the main objective is to earn profit from business along with the satisfaction of human wants. Marketing activities undertaken by sellers make an attempt to find out the weaknesses in the existing system, and measures are taken to improve the shortfalls so that the objectives are achieved.
Continuous and regular activity:
Marketing is an activity designed to plan, price, promote and distribute products. At the same time, it also addresses both the current and future consumers. Thus, it is a continuous process. A marketer has to consistently monitor environment. This helps in coming up with new products.
Marketing environment:
Economic policies, market conditions, and environmental factors, such as political, technological, demographic and international, influence marketing activities. Marketing activities are inseparable from such environmental factors. A successful marketer needs to adapt to these changing factors and adjust marketing strategies to suit new market developments.
Marketing mix:
A combination of four inputs constitutes the core of a company’s marketing system product, price, place, and promotion. Marketing mix is a flexible combination of variables. They are influenced by consumer behaviour, trade factors, competition and government regulatory measures.
Integrated approach:
The marketing activities must be co-ordinated with other functional areas of an organization. Functions such as production, finance, research, purchasing, storekeeping and public relations (PR) are to be integrated with marketing. This will help in achieving organizational objectives. Otherwise, it will result in organizational conflicts.
Commercial and non-commercial organizations:
With the societal marketing concept gaining importance, social marketers are finding useful new ways of applying marketing principles. Commercial organizations are also adopting cause-related marketing to strike long-term relations with consumers.
Business organizations such as educational institutions, hospitals, religious institutions and charitable trusts have also found meaningful applications of marketing. Thus, marketing is applicable to both business and non-business organizations.
Precedes and follows production:
Identifying consumer needs and wants is the primary task of a marketing manager. Production activities are adapted to these consumer needs. Thus, marketing precedes production. Marketing helps in the distribution of the goods which follows production. Hence, production and marketing activities are closely related to each other.
Advantages
Marketing Stabilizes the Economic Conditions:
Marketing not only sets the economy revolving but also provides steady and stable economic conditions where all are happy. It bridges the gap between producer and consumers. It is a connecting belt between the two wheels of the economy of a nation, i.e., the production and the consumption. Marketing by balancing production with consumption, provides stable prices, full employment and a strong economy.
Marketing Acts as a Basis for Making Decisions:
An entrepreneur is confronted with many problems as to what, how, when, how much and for whom to produce? In the past, there were lesser problems on account of local markets and direct link between the producers and the consumers. But in modern times, marketing has become very complex and tedious. It has emerged as a new specialized activity along with production. As a result, producers are largely dependent upon marketing mechanism to decide which, how when and how much to produce.
Marketing Provides Maximum Satisfaction of Human Wants:
It serves as an effective link between the business and the society, removes hindrances of knowledge, educates people, cultivates their minds, lures them to buy the best and thus enables ultimately to get maximum satisfaction.
Marketing Provides Gainful Employment Opportunities:
Marketing creates a climate for more production and services. It also results in more social overhead as more roads, more warehousing facilities, more transport and communication, more banks, more training and technical institutions, more manpower is needed for the same and the avenues of employment increase. Moreover, marketing is a complex mechanism involving a number of functions and sub-functions which call for different specialized personnel for employment. It is estimated that 30 to 40 per cent of total population is engaged in direct or indirect marketing activities.
Marketing Raises the Standard of Living:
With the provision of more items of necessities, comforts and luxuries, cheaper as well as costly and with more services and amenities as its disposal, the community enjoys a higher standard of living. Even the poorer sections of society find many more things within their reach because of lowering of costs of commodities and services. Paul Mazur says “marketing is the delivery of a standard of living to society”. Prof. Malcom Me Nair added further that “marketing is the creation and delivery of standard of living to society.”
Marketing Increases the National Income:
National income is the sum total of goods and services that a nation possesses. The net effect of all marketing efforts is a rise in production of existing industries, investment in new industrial units and provision of more services. The nation becomes richer with the increase in its national income and there is a rise in per capita income. The economy rises from underdeveloped stage to developing stage and then marches towards a developed economy.
Marketing Facilitates Exchanges in the Ownership and Possession of Goods and Services:
It creates time, place and possession utilities for the goods and services. It is helpful to both producers and consumers. Producers come to know about the specific needs and preferences of the people and the customers about the products that manufacturers can offer.
Marketing Widens the Market:
Marketing draws out the hidden wants of consumers, creates new demand, locates the untapped areas and finds out the possibilities of selling new products. It thus enlarges the market and enables the producers to increase production and earn more profits.
Disadvantages of Advertising
Multiplication of Needs:
Advertising compels people to buy things they do not need as it is human instincts, to possess, to be recognized in the society, etc., are provoked by advertiser in order to sell products. At times, various types of appeals are advanced to arouse interest in the product. Sentiments and emotions are played with to gain customers.
Product Proliferation:
Critics state that advertising encourages unnecessary product proliferation. As it leads to the multiplication of products that are almost identical, resulting in wastage of resources which could otherwise have been used to produce other products.
Increased Cost:
It is much debated whether advertising induces additional cost upon a product which the community has to pay. In a sense, it is true since expenses on it form a part of the total cost of the product. But at the same time, it would be unjust to infer that if the advertising costs were cut down the goods would necessarily be cheaper. Advertising is, one of the items of costs but it is a cost which brings savings in its wake on the distribution side.
Wastage of National Resources:
It is objected that advertisement is that it is used to destroy the utility of goods before the end of their normal period of usefulness. Now models of automobiles with nominal improvements are, for example, advertised at such high pressure that the old models have to be discarded long before they become useless, not that merely, the most-advertised products are delicate, fragile, and brittle.
Barriers to Entry:
Advertisements promote industrial concentration to a greater or lesser degree. The extent of such concentration may vary with the character of the individual trade, the advertisability of the product and the technical conditions of its production. Although, studies on this subject are not conclusive. The evidence of positive association between advertising and concentration is weaker than can be expected.
Consumer’s Deficit:
Advertising creates desires as consumers have low purchasing power. It leads to discontentment. Such discontent is obviously not very desirable from the point of view of society, particularly if it affects a large majority of people. But it is important if it acts as a spur to social change.
Misrepresentation of Facts:
A major drawback of advertising is misrepresentation of facts regarding products and services. Advertisers usually misrepresent unreal/false benefits of a product and make tall claims to excite people to indulge in actions leading to their benefit, but opposed to consumer’s self-interest.
Deferred Revenue Expenditure:
It is a deferred revenue expenditure, as the results are not immediate. As advertising occupies a substantial portion of the total budget of the organisation. Hence, investing a large sum in it does not necessarily yield immediate results thus limiting its utility.